Switzerland moving towards tax transparency

By FT.com

Switzerland, one of the world’s largest offshore financial centres, has agreed to exchange tax information automatically with other countries, in a significant breakthrough in the international crackdown on evasion (…).

The move is a big step forward for governments that have mounted a concerted attack on evasion in the wake of the global financial crisis and a series of evasion scandals. Switzerland has played a pivotal role in the struggle to prise open taxpayers’ secret offshore accounts because of its long tradition of bank secrecy and its dominant position in the offshore banking with $2.2tn of assets under management.

The declaration, which is being signed at the Organisation for Economic Co-operation and Development in Paris, will commit countries to the swift implementation of the new global standard. It will require them to collect and exchange information on bank accounts and the beneficial ownership of companies and other legal structures such as trusts.

In a statement, the Swiss Bankers Association said the move had been planned for a year and would not come as a surprise to Swiss banks. (…)

Switzerland is joining at least 44 countries in signing the agreement, which includes other members of the OECD, the G20 group of leading countries and offshore centres such as the Cayman Islands and Jersey. The global standard has been developed by the OECD and endorsed by the G20.

The remaining offshore centres are expected to come under pressure to join in, as G20 countries have expressed a willingness to impose sanctions on jurisdictions that refuse to share information. A blacklist of uncooperative countries that do not sign up to transparency measures is likely to be drawn up by the OECD later in the year.

Some offshore account holders are reported to have moved their money to the handful of centres, such as Panama and Dubai, that have held back from the transparency drive. Asian centres such as Hong Kong and Singapore, which mainly draw clients from Asia-Pacific and the Middle East, have so far been less affected by calls for greater transparency but Singapore has already signalled its willingness to help other governments clamp down on tax evasion.

To read more go to: FT.com

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